micro-purchase threshold

GSA is starting small with its commercially-operated online purchasing portals, with a pilot scheduled by the end of 2019.

Initially, only commercial products/services below the government’s micro-purchase limit will be offered. But the threshold of $10,000 differs from the $250,000 Congressional limit put into place at the time the e-commerce experiment was ordered, which allows GSA to sidestep policy requirements such as the Buy American Act and the Trade Agreements Act. We aren’t certain how these will apply to the new e-commerce portal, as purchases below the $10,000 threshold are already exempt from a wide variety of procurement laws. GSA wants the portals to show agency buyers the vendor’s business size and qualification as a preferred supplier in other categories. (J.Serbu, Federal News Network December 13, 2018)

There is a current gap between what the government procures through open market procurement (often via a purchase card) and what the government knows it buys for commercial items. GSA intends that the centrally managed and monitored portal will assist the government in determining the products agencies are purchasing and introducing into the federal supply chain. (J.Serbu, Federal News Network December 13, 2018)

The draft terms and conditions seem to deviate substantially from the FAR, and are a little “gray,” so we need to wait and see how this turns out. (J.Serbu, Federal News Network December 13, 2018) We all know that our Ts and Cs are of the utmost importance to government auditors and regulatory compliance. Other important questions include:

why would agencies use the new e-commerce platform when they can get good commercial item prices via GSA Schedules and the Advantage portal?

will the new e-commerce portal actually save the Government money?

This nifty e-commerce pilot portal will help determine the answer to these questions. Do you have a question about the e-commerce portal or GSA Schedules? Give us a call at 301-913-5000: we are here to help.

During a recent industry day, GSA reiterated that the Portals Program will focus on transactions under the Micro-Purchase Threshold. The current draft of the 2019 National Defense Authorization Act grants a GSA request to increase the Micro-Purchase threshold for purchases through approved portals to $25,000. If included in the final draft, this will make the Portals Program the preferred vehicle for any micro-purchases. The GSA Schedules Program will remain the preferred contracting vehicle for all other commercial item procurements. GSA said this would simplify the acquisition process and address federal buying requirements (such as considering AbilityOne and designated small business contractors for procurement).

On the other hand, not all industry partners are so enthusiastic. Will this create two completely separate market places for the same services and products, at two different price barriers? Some contractors are nervous that the Portal initiative might create a different compliance structure from Multiple Award Contracts, potentially leaving businesses with difficult decisions. The concern is that the move will create parallel systems of compliance and companies will have to weigh the cost of navigating both.

Roger Waldron, president of Coalition for Government Procurement, has an example. “If there are compliance requirements in one channel and they don’t exist in another channel, do (businesses) stay in the channel where they have compliance requirements and increase costs and lower margins? They are going to be making those kinds of business decisions ultimately.”

In response, GSA officials said they are still weighing how to design the policies for the portals and would be testing the new micropurchase threshold in a proof of concept pilot sometime next year. Jeffrey Koses of the Office of Governmentwide Policy said GSA is “still trying to determine if this is more of an [indefinite delivery/indefinite quantity] type of relationship or is this something else. It’s a fair question. I don’t know if we have all of the answers at this point.”